The document discusses the legal definition of "industry" under the Industrial Disputes Act, 1947 in India through a series of court cases. Key points include:
1) Industry is defined broadly and includes any systematic activity involving cooperation between employers and employees for production/distribution of goods or services.
2) Profit motive is not required - government entities and charitable organizations can be industries.
3) Hospitals, clubs, and educational institutions are sometimes considered industries based on the nature of activities and employer-employee relationships.
4) Certain "liberal professions" like law firms are usually not considered industries due to their non-material services.
The document discusses the legal definition of "industry" under the Industrial Disputes Act, 1947 in India through a series of court cases. Key points include:
1) Industry is defined broadly and includes any systematic activity involving cooperation between employers and employees for production/distribution of goods or services.
2) Profit motive is not required - government entities and charitable organizations can be industries.
3) Hospitals, clubs, and educational institutions are sometimes considered industries based on the nature of activities and employer-employee relationships.
4) Certain "liberal professions" like law firms are usually not considered industries due to their non-material services.
The document discusses the legal definition of "industry" under the Industrial Disputes Act, 1947 in India through a series of court cases. Key points include:
1) Industry is defined broadly and includes any systematic activity involving cooperation between employers and employees for production/distribution of goods or services.
2) Profit motive is not required - government entities and charitable organizations can be industries.
3) Hospitals, clubs, and educational institutions are sometimes considered industries based on the nature of activities and employer-employee relationships.
4) Certain "liberal professions" like law firms are usually not considered industries due to their non-material services.
The document discusses the legal definition of "industry" under the Industrial Disputes Act, 1947 in India through a series of court cases. Key points include:
1) Industry is defined broadly and includes any systematic activity involving cooperation between employers and employees for production/distribution of goods or services.
2) Profit motive is not required - government entities and charitable organizations can be industries.
3) Hospitals, clubs, and educational institutions are sometimes considered industries based on the nature of activities and employer-employee relationships.
4) Certain "liberal professions" like law firms are usually not considered industries due to their non-material services.
BANGALORE WATER MUNICIPAL SUPPLY CHARITABLE CORPORATIONS INSTITUTIONS CASE 1978 MUNICIPALITIES AND MUNICIPAL CORPORATIONS D.N. Banerjee v P.R. Mukherjee (1953) 1 LLJ 195 (Known as the Budge Budge Municipality Case) The word ‘undertaking’ in the definition of ‘industry’ is wedged between business and trade on one hand, and manufacture on the other. The intention of the definition is to include within its scope what might not strictly be called a trade or business venture. ‘Undertaking’ in the first part of the definition and ‘industrial occupation’ and ‘avocation’ in the second part of the definition mean much more than what is understood by business or trade. Thus, municipalities fall within the definition of ‘industry’ Baroda Borough Municipality v Its Workmen AIR 1957 SC 110 Profit motive is irrelevant. There was existence of employer-employee relationship, and the undertaking could be regarded as analogous to the carrying on of a trade or business. Affirmed the findings of the D.N. Banerjee Case. MUNICIPALITIES AND MUNICIPAL CORPORATIONS Corporation of City Nagpur v Its Employees (1960) 1 LLJ 523 Court laid down the following tests: 1. Definition of industry is in two parts. If an activity falls under either part of the definition, it will be an industry within the meaning of the Act. 2. The activity shall be an organized one, not that which pertains to private or personal employment. 3. Regal functions, such as legislative power, judicial power, administration of law, are excluded from the definition of industry. 4. If a service rendered by a corporation is an industry, the employees in the departments connected with that service, whether financial, administrative or executive, would be entitled to the benefits of the Act. 5. If a department of a municipality discharges many functions, some pertaining to industry as defined in the Act and other non-industrial activities, the predominant functions of the department shall be the criterion for the purposes of the Act. HOSPITALS
State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 SC
‘Systematic activity’ test laid down – an activity systematically or habitually undertaken for production or distribution of goods or for rendering of material services to the community at large or a part of such community with the help of employees is an undertaking. Thus, hospital is an industry.
TRIPLE TEST
COOPERATION OBJECT IS TO RENDER
SYSTEMATIC ACTIVITY BETWEEN EMPLOYER MATERIAL SERVICE TO AND EMPLOYEE THE COMMUNITY HOSPITALS Management of Safdarjung Hospital v Kuldip Singh Sethi AIR 1970 SC 1407 Reversed the decision of Hospital Mazdoor Sabha Case. Held that: 1. The definition has to be read as a whole which denotes ‘industry’ to be a collective enterprise. 2. The word ‘industry’ must be contextualized in the definition of ‘workman’. 3. The industry should have an economic content. 4. Material services involve an activity carried on through cooperation between employers and employees to provide the community with the use of something, and the emphasis is upon the productivity of a service organized as an industry and commercially valuable. Thus, hospital is not covered under the definition of ‘industry’ Management of Hospital, Orissa v Their Workmen (1971) Lab.I.C. 835 SC Held hospital was not an industry because it was run as part of the functions of the government. Mere fact that payment was accepted in respect of some beds could not lead to the inference that hospitals were run as a business in a commercial way. Primarily hospitals were meant to be run without any profit motive. Reiterated the Safdarjung Hospital Case. CHARITABLE INSTITUTIONS Bombay Pinjrapole v Their Workmen (1971) 2 LLJ 393 SC Held to be an ‘industry’ because they share business-like operations.
ENTERPRISES
MAKES NO PROFIT BUT HIRES THE ORIENTED ON A HUMANE MISSION
YIELDS PROFITS BUT THEY ARE SERVICES OF EMPLOYEES. THE FULFILLED BY THOSE WHO WORK SIPHONED OFF FOR ALTRUISTIC GOODS AND SERVICES WHICH ARE BECAUSE THEY SHARE A PASSION OBJECTS THE OUTPUT ARE MADE AVAILABLE FOR THE CAUSE AND DERIVE JOB AT LOW OR NO COST TO THE SATISFACTION FROM THEIR NEEDY. CONTRIBUTION
INDUSTRY INDUSTRY NOT AN INDUSTRY
EDUCATIONAL INSTITUTIONS
University of Delhi v Ram Nath AIR 1963 SC 1873
Held that educational institutions were not ‘industry’ because ■ predominant function of the university was to impart education. ■ Teachers were not workmen, and ■ other persons employed were insignificant in number and did minor and insignificant work. ■ The object of imparting education is not a trade/ business. Therefore, university is not an ‘industry’. CLUBS Cricket Club of India v Bombay Labour Union (1966) 1 LLJ 775 Club is not an ‘industry’ because it is a members’ club without any shareholders. Wrong to equate the activity with that of a hotel. Just because occasionally they open the club to general public for buying snacks, etc. does not make it an ‘undertaking’ of the nature of business or trade. Madras Gymkhana Club Employees’ Union v Management of Madras Gymkhana Club AIR 1968 SC 554 Cardinal test was whether there was an industry according to the denotation of the words in the first part of the definition. The second part, by itself, did not enlarge the meaning of industry. Though the material needs or wants of a section of the community is catered for it is not done as part of trade or business or as an undertaking analogous to trade or business. SOLICITOR FIRMS
National Union of Commercial Employees’ v M. R. Mehar AIR 1962 SC 1080
Held that the firm was a ‘liberal profession’ and was not an industry because there is no direct or immediate cooperation between solicitor and his employees to the professional service which the solicitor rendered to his client. Services rendered by a person involved in a liberal profession required special or peculiar intellectual and educational equipment and were not ‘material’. NOT AN INDUSTRY INDUSTRY BANGALORE WATER SUPPLY & SEWERAGE BOARD v A. RAJAPPA AIR 1978 SC 548 The following tests were laid down to determine the scope of the term ‘industry’: 1. Where (i) systematic activity, (ii) organized by cooperation between employer and employee (the direct and substantial element is chimerical); (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious, but inclusive of material things or services geared to celestial bliss e.g. making, on a large scale prasad or food), prima facie there is an 'industry' in that enterprise. 2. Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector. 3. The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations. 4. If the organization is a trade or business it does not cease to be one because of philanthropy animating the undertaking. BANGALORE WATER SUPPLY & SEWERAGE BOARD v A. RAJAPPA AIR 1978 SC 548 ■ 'Undertaking' must suffer a contextual and associational shrinkage as explained in D N Banerjee Case. ■ All organized activity possessing the triple elements, although not trade or business, may still be 'industry' provided the nature of the activity, viz. the employer-employee basis bears resemblance to what we find in trade or business. ■ The dominant nature test : Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not 'workmen' or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur Case, will be the true test. The whole undertaking will be 'industry' although those who are not 'workmen' by definition may not benefit by the status. BANGALORE WATER SUPPLY & SEWERAGE BOARD v A. RAJAPPA AIR 1978 SC 548 Exemptions: ■ A restricted category of, professions, clubs, cooperatives and even gurukuls and little research labs, may qualify for exemption if, applying the dominant nature criterion, substantively no employees are entertained but in minimal matters, marginal employees are hired without destroying the non-employee character of the unit. ■ If, in a pious or altruistic mission, many employ themselves, free or for small honoraria, mainly drawn by sharing in the purpose or cause, and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant relationship, then the institution is not an industry. ■ Sovereign functions SUBSEQUENT CASES
Coir Board, Ernakulam v Indira Devi AIR 1998 SC 259
Held, coir board is an industry. No need to reconsider the Bangalore Water Supply Judgment. State of U.P. v Jaibir Singh (2005) 5 SCC 1 Whether the amended definition, although not enforced, is a relevant piece of subsequent legislation which can be taken aid of to amplify or restrict the ambit of the definition of `industry' in Section 2(j) of the act as it stands in its original form. A larger bench be constituted to reconsider the Bangalore Water Supply decision. CODE OF INDUSTRIAL RELATIONS 2020
■ Definition of ‘industry’ under Section 2(p), same as the definition of 1982, with fewer exceptions. ■ does not include— (i) institutions owned or managed by organizations wholly or substantially engaged in any charitable, social or philanthropic service; or – (ii) any activity of the appropriate Government relatable to the sovereign functions of the appropriate Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space; or – (iii) any domestic service; or – (iv) any other activity as may be notified by the Central Government; CODE OF INDUSTRIAL RELATIONS 2020 ■ Section 2(r) – ‘industrial establishment or undertaking’ - means an establishment or undertaking in which any industry is carried on.
SEVERAL ACTIVITIES
ONLY SOME OF SUCH
ACTIVITIES ARE INDUSTRY
UNIT CARRYING ON SUCH PREDOMINANT ACTIVITY IS
ACTIVITY IS SEVERABLE INDUSTRY AND OTHER UNITS FROM OTHER UNITS ARE NOT SEVERABLE
ENTIRE ESTABLISHMENT/ SUCH UNIT DEEMED TO BE A UNDERTAKING/ UNIT SHALL SEPARATE INDUSTRIAL BE DEEMED TO BE AN ESTABLISHMENT OR INDUSTRIAL ESTABLISHMENT UNDERTAKING OR UNDERTAKING
